In early December, English soccer’s Premier League launched its new invitations to tender (ITT) for its next cycle of UK audio-visual rights, which will run from 2019 to 2022. At the forefront of the multi-billion pound battle to come will be the two incumbent live broadcasters: British pay-TV giants Sky Sports and BT Sport.
However, less than a week after world’s richest soccer league launched its new sales process, the two rivals’ main platforms announced a surprise content collaboration which will improve the subscription packages that both organisations can offer.
Sky and BT TV have reached an agreement to sell their titled channels on each other's platforms from the start of 2019. BT has agreed to wholesale its BT Sport channels to Sky, while Sky’s Now TV OTT service will be available on BT TV.
As a result, Sky viewers will have access to BT Sport content - which includes Premier League games as well as the Uefa club competitions, the Champions League and Europa League - with a single Sky subscription.
BT TV customers will be able to watch all 11 Sky Sports channels, as well as entertainment channels like Sky Living, Sky One, and Sky Atlantic, which is the home of original Sky programming and series like Game of Thrones from US network HBO.
Andy Haworth, managing director of content and strategy at BT, tells SportsPro about how the major content sharing agreement arose, what it means for the ongoing rivalry between the two broadcasters, what advantages it will give its customers, how BT TV can make the BT brand relevant to new generations, and how the collaboration can help the traditional subscription broadcasters against the looming threat of new digital rivals with seemingly bottomless pockets.
Andy Haworth, managing director of content and strategy at BT
SportsPro: Could you explain why the agreement with Sky has come about? Which organisation made the initial approach?
AH: I think that this is the natural evolution of our TV strategy. BT Sport, which is only four and a half years old, has gone from nowhere to have five million subscribers in such a relatively short period of time.
Having had great offers [available] for our broadband and TV customers up until this point, it was just the right moment in time to extend our reach further and take BT Sport into Sky households. This will strengthen BT Sport for the future so it was a natural evolution from the sports side.
On the BT TV side, it is clearly a great win for our customers. For the first time, our customers will be able to get all of Sky’s content: including all 11 Sky Sports channels; all of their entertainment channels, including Sky Atlantic.
All of our customer research has shown us that Sky channels are the most important pay-TV channels in the UK and they have been absent from our platform for a long time. This closes that gap and makes BT TV probably the most complete platform in the marketplace in the UK today, which is great news for our customers.
In terms of timing, we have been in conversation with Sky for a long time and ultimately this was the culmination of the latest conversation that started quite early in the year - around March - when we found a way to reengage collectively.
We have done a lot of work from March until last week, when we finally managed to find a way through, which is great news for their customers and great news for ours.
What advantages do you expect to gain from making each other’s title channels available on your respective platforms?
For us, it is really about tapping into the customers on the satellite platform that we haven’t been able to reach.
BT Sport has been hugely successful but there are still a significant number of premium sports customers - particularly those that want Sky Sports - which we haven’t managed to get to subscribe to BT Sport. So actually, getting Sky to help us target those customers, it will only add more value and grow the reach of BT Sport into more homes. This is why we are extremely happy.
In relation to the supply of Now TV, and all of its available Sky channels, it obviously makes BT TV a much more competitive television offering in the marketplace. It is the only platform in the UK that includes Sky Atlantic other than the satellite platform. So, we have gone from having a big hole in our platform to actually having a really compelling offering for customers
Gavin Patterson, chief executive of BT, said the collaboration is the “next logical step for our TV and content strategy”. Could you explain BT Sport’s content strategy and why the agreement with Sky is now such a key element of it? What is more significant for you: the sport content or the entertainment?
If you remember in the past we’ve had - and we still do - access to some of Sky Sports content through Sky Sports Main Event, as it is currently called, but what has been really obvious is that having part of Sky’s portfolio has never been enough for customers. They have always wanted all the elements so there is a contingent value from having all of the content together.
Former Liverpool and England captain is one of BT Sport’s high profile soccer pundits
So when you ask, ‘Is it more Sky Entertainment, Sky Sports, Sky Cinema or Sky Kids?’ The answer is all of it is mutually reinforcing [the quality] along with BT Sport, AMC and other content we have on the platform.
It creates a much stronger proposition and it really is about bringing all of this content together into a single experience for our customers.
There is a very subtle shift around our BT TV strategy.
You referred to Gavin’s statement about our content strategy and this is about realising that customers want exclusivity, they want all the great content they love in a single, easy-to-use experience. Adding Sky channels via Now TV is the next logical step on top of the pay channels we have.
There is a bit of a tilt more towards inclusivity but still valuing exclusivity in terms of BT Sport as a point of difference.
BT Sport was initially viewed as a way of getting BT broadband into more homes. Does this move mark a further shift away from that strategy?
I think it builds on it. It is important to say that BT Sport is still really important and really valued by our subscribers and our BT TV subscribers: that is not going to change as far as this deal. What is going to change is that BT Sport will now be available to even more households.
I would say that it is building on our current strategy rather than shift away from it.
The last thing to say is that BT Sport continues to get stronger. Obviously next season we go into a new Uefa Champions League period and we have got fully exclusive live rights on our platform, including the highlights as well for the first time.
Why do you feel that now is the right time to broaden the way in which BT Sport is distributed? What will it mean for BT Sport subscribers that want to watch sport going forward?
If you look at the impact that BT Sport has whether it is differentiating from our broadband, it has naturally evolved from there to helping us drive BT TV.
I think that there are a lot of customers still out there that would love to have access to BT Sport, so this is just us taking it to the last step.
How far does this change the dynamic in your perceived rivalry with Sky Sports?
Look, we are still going to be fierce competitors in same way that we wholesale to Virgin Media but still compete very fiercely with them.
It is about recognising that there is advantage to both of our customers and I think that both of us do. This is about giving our customers what they wanted. We are going to compete hard but fairly in the marketplace, as we have always done.
BT Sport soccer pundits watch a Premier League game from their studio
How much of reshaping the business is in order to better compete with digital rivals, which are all making overtures towards acquiring sports properties?
It is obviously a very topical question. The one thing that we have always tried to stay true to is that we always focus on what we want to do for our customers and how we create value for them. We always listen to what they want.
That is how we approach everything, whether it be our sports rights auctions or indeed our content deals. What we are seeing right now is more and more providers coming into the marketplace in both entertainment and sports rights.
If you think about our strategy here - particularly on BT TV - it is about bringing all of that content together in a great single experience on our TV platform. We are really well placed to take advantage of that trend if it happens or accelerates.
At the same time, we really value the role that BT Sport has in terms of creating that point of difference for BT subscribers and taking the brand to a whole new generation, who perhaps grew up not knowing the brand as much us the older generations. There is definitely something about taking the BT brand and making it relevant again, for all generations, and I think that sport is a great way of doing that. We believe that it helps us do that.
We are well positioned with BT TV based on the fact that it is an open platform and it all about bringing in third party content together for the customer. If some of the trends you talk about - Netflix, Amazon or whoever, there is a long list - start to go into content, I think that we are well placed.
How will this deal affect the way that you will approach the upcoming Premier League’s domestic invitation to tender?
It is probably too early to say. I think that we are still working through our strategy and, as you can imagine, I am not going to comment on it. Clearly we have not discussed this with Sky, for very obvious reasons.
Exclusive sport is a very important thing for our subscribers and it underpins a large number of our subscribers. For many, it is the reason they joined BT and stayed with it.
Therefore we see it as a really important part of our strategy and we will approach the auction with that in mind.